Difference-in-Difference Results


We matched the SKUs of regulated molecules in India with those in the Philippines (e.g., Acetazolamide 250mg from India and Philippines). We identified 84 SKUs in the Philippines dataset that matched (exact composition and strength) the regulated SKUs in India.

We present the pattern of average sales for these 84 SKUs in the two countries in figure below (due to difference in scale between the two countries, we present them in two axes). We present the results of the difference-in-difference analysis in the table below. 

Preliminary Analysis: Difference-in-Difference Estimates using the Philippines Market as Control

Explanatory variables Sales: 101 SKUs from each market Sales: 94 SKUs from each market (7 dropped due to MDRP) Sales: 84 SKUs from each market (10 more dropped due to GMAP)
Country (1=India) 684,254,289*** (28,547,847) 638,285,247*** (28,138,144) 598,558,421*** (28,880,502)
PostReg (1=yes) 108,547 (39,257,532) -58,981 (33,986,311) -539,845 (29,921,254)
Country * PostReg -1,925,884* (1,119,114) -2,084,547** (691,854) -2,353,824** (737,653)
Constant -295,588,412 (502,261,698) -281,251,209 (495,524,881) -254,841,473 (487,002,322)
Observations 4,039 3,759 3,359
R-squared 0.652 0.611 0.599
SKU FEa Yes Yes Yes
Quarter FE Yes Yes Yes
SKU-Quarter FE Yes Yes Yes

Robust errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1  
a) FE refers to fixed effects

Average Sales in India (treated) and Philippines (control) for 84 Regulated SKUs

The graph presents the average quarterly sales volumes of 84 SKUs from India (under regulation) and Philippines
The averages (pre and post-regulation) presented in Table 1 are for 179 SKUs per month, whereas this figure presents the pattern of sales volumes for 84 SKUs from India and the Philippines.